Mundelein apartments fetch $80 million

The acquisition by Chicago landlord Stuart Handler pushes his local holdings past the 5,000-unit threshold.

Chicago apartment landlord Stuart Handler paid $80 million for an apartment complex in Mundelein, a deal that pushes his holdings here past the 5,000-unit mark.

A venture led by Handler acquired Madison Park Butterfield, a 522-unit property at 2200 S. Butterfield Road, from Equus Capital Partners, a Yardley, Pa.-based investment firm, according to Handler, CEO of TLC Management.

The acquisition is the sixth in the Chicago suburbs by Chicago-based TLC and second this year, after its $53 million purchase of Stratford Place, now Windsor Estate, in Bloomingdale.

Handler, who began buying apartments about four decades ago, has amassed a 5,000-unit portfolio in the Chicago area by following a slow and steady approach, acquiring one or two properties a year. He started in the city, investing in vintage apartment buildings in neighborhoods near the lake, and then branched out into the suburbs a few years ago.

Handler, who finances his deals with his own equity, doesn't chase the best or the biggest properties, but aims for the midmarket. He classifies the Madison Park Butterfield—which he is renaming the Park Butterfield—as Class B property ripe for a renovation.

"It's a 'B' right now," he said. "We'll bring it up to a 'B-plus.'"

Handler expects to spend about $2 million fixing up the common areas and adding new landscaping, a playground and dog park. He aims to renovate the apartments when they turn over.

Handler said he paid $80 million for the complex, or about $153,000 a unit. Equus bought the property for $60 million in 2007, according to Lake County property records. An Equus executive did not return a call.

The Chicago office of CBRE brokered the sale to TLC.

The deal adds to an already large tally of suburban apartment sales this year. Accounting for suburban properties that have sold or are on the market, sales this year could top last year's deal volume of $1.66 billion, a record for the suburbs.

Rising rents and high occupancies also have been good to suburban landlords. The Park Butterfield is 96.9 percent leased, Handler said. Rents range from $1,084 per month for a studio apartment to $1,442 for the most expensive two-bedroom unit, according to real estate information provider CoStar Group. But rents, which tend to bounce around, have fallen to $1.23 per square foot, down 3.9 percent from a year earlier, according to CoStar.